PETALING JAYA: Gamuda Bhd
’s latest Australian solar project win, via an early contractor involvement (ECI) structure for a RM600mil engineering, procurement, construction and commissioning (EPCC) contract, is expected to generate about RM30mil in pre-tax profit over its construction period through 2028.
Following engagements, TA Research said the group remains confident of achieving its typical Australian renewable energy project pre-tax profit margin of around 5%.
This, the research firm said, is supported by its early involvement in design, approvals and pricing, “which enabled pricing to be aligned with the prevailing cost environment and mitigated cost escalation risks.”
“Based on a 5% margin assumption, we estimate the project could contribute approximately RM30mil in pre-tax profit to Gamuda over the project duration,” it noted.
Similarly, BIMB Research noted that the ECI framework allows closer collaboration with the client at the upfront stage, materially improving procurement visibility and reducing pricing mismatches that have historically affected renewable EPCC projects globally.
“Despite being a fixed-price EPCC contract, management guided a relatively stable, about 5% pre-tax profit margin, supported by the upfront cost visibility established during the ECI phase,” it said.
BIMB Research said the 5% pre-tax profit margin equates to approximately 0.4 sen in lifecycle earnings per share (EPS) contribution.
“Annual EPS impact is likely limited to about 0.1 to 0.2 sen depending on execution timing,” it said.
While the financial contribution remains modest, the research house views its earnings quality positively given the lower-risk ECI structure.
“We believe the more important takeaway is DTI Infrastructure’s strengthening position as a renewable EPCC contractor in Australia,” it said.
Meanwhile, MBSB Research said the RM30mil lifecycle pre-tax profit translates into about RM23mil in lifecycle profit after tax.
The Jinbi Solar Project, located in the Pilbara region of Western Australia, is developed for Yindjibarndi Energy Corp, a joint venture between Yindjibarndi Aboriginal Corp and ACEN, a subsidiary of the Philippines-based Ayala Corp, with Gamuda wholly-owned subsidiary DTI Infrastructure securing the ECI contract.
It involves an initial 75MW solar photovoltaic facility, with potential expansion to 150MW, alongside optional integration of a battery energy storage system (BESS).
The project, comprising about 160,000 solar panels, is scheduled to begin construction this year, with operations targeted for 2028.
Gamuda’s latest win brings its order book to an all-time high of RM52.2bil.
Analysts said this translates into a 4.2 times coverage of its financial year ended July 31, 2025 (FY25) construction revenue.
Year-to-date in FY26, the latest award lifts Gamuda’s cumulative new job wins to RM21.8bil.
TA Research views the latest win “positively”, noting that the ECI award also enhances Gamuda’s prospects of securing the main EPCC works for the project’s expansion phase.
“Based on our assumptions of similar construction costs for the additional 75MW expansion and an estimated RM3mil per MW for the BESS component, we estimate there could be up to RM750mil in additional job opportunities,” it added.
MBSB Research said the construction giant remains on track to meet its RM50bil to RM55bil order book target by end-2026, although it will still need to secure an additional RM8bil to RM13bil of new contracts over the coming months to sustain this level.
“We view this (lastest) development positively as it further diversifies Gamuda’s earnings base into renewable energy, particularly in Australia where policy support remains strong,” it noted.
“Additional upside could stem from potential wins such as the A$3.7bil New England Renewable Energy Zone transmission project, alongside domestic catalysts including the Northern Perak water supply scheme.”
MBSB Research has maintained its “buy” recommendation on Gamuda with an unchanged target price of RM5.60.
Similarly, BIMB Research and TA Research have maintained their “buy” calls on Gamuda with an unchanged target price of RM6.29 and RM5.62 a share, respectively.
